International Business

      1. You run a small company that manufactures plastic in" rel="nofollow">injection molded pieces for the construction in" rel="nofollow">industry. Currently, you manufacture your product in" rel="nofollow">in Win" rel="nofollow">indsor, Ontario and a small plant in" rel="nofollow">in Texas. You sell your products in" rel="nofollow">in both Canada and the United States. You are aware that NAFTA presented your company with in" rel="nofollow">increased access to the American market. You want to expand, and are aware of somethin" rel="nofollow">ing called the "European Union", but are unsure of what it means, whether Canada has join" rel="nofollow">ined and what your firm can do to get access to this large market. You are also in" rel="nofollow">interested to know whether there are other "groups of countries like NAFTA or the EU" out there. a) What are the primary impediments to in" rel="nofollow">integration of countries? Are these impediments difficult to overcome? Explain" rel="nofollow">in your answer. 2. Explain" rel="nofollow">in in" rel="nofollow">in the five levels of economic and political in" rel="nofollow">integration and give examples of specific countries/regions that might fit these levels.  What are main" rel="nofollow">in prin" rel="nofollow">inciples of GATT/WTO and what major types of trade policy in" rel="nofollow">instruments and trade policy issues/frictions/disputes in" rel="nofollow">international busin" rel="nofollow">iness managers should in" rel="nofollow">incorporate in" rel="nofollow">in their decision-makin" rel="nofollow">ing process? 3. Emergin" rel="nofollow">ing markets are a major focus of in" rel="nofollow">international busin" rel="nofollow">inesses, in" rel="nofollow">includin" rel="nofollow">ing Canadian in" rel="nofollow">international busin" rel="nofollow">inesses, goin" rel="nofollow">ing forward. a) What are the most important opportunities and challenges facin" rel="nofollow">ing busin" rel="nofollow">inesses operatin" rel="nofollow">ing in" rel="nofollow">in emergin" rel="nofollow">ing markets today? b) How might these challenges affect your decisions on how to expand (greenfield in" rel="nofollow">investment, acquisitions, local sourcin" rel="nofollow">ing of in" rel="nofollow">inputs, R&D and talent, etc.) in" rel="nofollow">into emergin" rel="nofollow">ing markets?c) How can an in" rel="nofollow">involvement in" rel="nofollow">in overseas markets help a firm capture experience curve advantages more rapidly? 4. (a) What are the different strategies to enter and compete in" rel="nofollow">in the in" rel="nofollow">international environment?(b) Analyze the six different ways for a firm to enter a foreign market. What considerations would drive a company to choose among them?(c) Firms that compete in" rel="nofollow">in global markets often face pressures for local responsiveness. Describe what is meant by local responsiveness, and identify the underlyin" rel="nofollow">ing reasons that local responsiveness pressures exist.(d) Under what circumstances is enterin" rel="nofollow">ing in" rel="nofollow">into strategic alliances a risky undertakin" rel="nofollow">ing?(e) What types of core competencies are the most valuable for penetratin" rel="nofollow">ing foreign markets? 5. Consider that in" rel="nofollow">in Fall 2017, the Trump admin" rel="nofollow">inistration uses U.S. trade policy by imposin" rel="nofollow">ing, say a 25% tariffs on steel imports from Chin" rel="nofollow">ina as a fix to, what it perceives to be, a Chin" rel="nofollow">ina’s foreign exchange rate policy of devaluatin" rel="nofollow">ing the yuan again" rel="nofollow">inst the US dollar. Keep in" rel="nofollow">in min" rel="nofollow">ind that Chin" rel="nofollow">ina in" rel="nofollow">in 2016 is the top exporter to the U.S., followed by Mexico, who has pushed Canada down to the third spot. (Do succin" rel="nofollow">inctly summarize the content of the theory, model, prin" rel="nofollow">inciples that will be applicable as well as draw the appropriate diagrams and flow charts in" rel="nofollow">in doin" rel="nofollow">ing the analysis and answerin" rel="nofollow">ing the followin" rel="nofollow">ing questions. Provide full logical explanation for your conclusions and answers.  Please, be specific–as presented in" rel="nofollow">in the class room lectures—in" rel="nofollow">in summarizin" rel="nofollow">ing the content and logical analytics.) a. How would busin" rel="nofollow">iness change for companies producin" rel="nofollow">ing in" rel="nofollow">in the U.S. in" rel="nofollow">in the tariff affected in" rel="nofollow">industry? Impact on competition, sales, profitability, employment and wages?  Also analyze the impact, if any, this would have on busin" rel="nofollow">iness in" rel="nofollow">in that in" rel="nofollow">industry in" rel="nofollow">in Canada. b. How would busin" rel="nofollow">iness change for companies in" rel="nofollow">in the rest of the U.S., that is in" rel="nofollow">in in" rel="nofollow">industries not subject to the tariff? Impact on competition, sales, profitability, employment and wages?c. What would be the impact on offshorin" rel="nofollow">ing activities of companies operatin" rel="nofollow">ing in" rel="nofollow">independently out of the Canada, U.S., Chin" rel="nofollow">ina and other emergin" rel="nofollow">ing market locations (consider only one location at a time)?  Analyze possible effect on wages of high-skilled workers relative low-skilled workers, possible effects on kin" rel="nofollow">ind of activities performed along the skills-value added supply chain" rel="nofollow">in.  d. Keep in" rel="nofollow">in min" rel="nofollow">ind that both Chin" rel="nofollow">ina and the U.S. are members of the WTO.  Outlin" rel="nofollow">ine what options are available to Chin" rel="nofollow">ina in" rel="nofollow">in tacklin" rel="nofollow">ing this U.S. trade policy?  Discuss at least two options and their possible consequences for busin" rel="nofollow">inesses in" rel="nofollow">in the U.S.e. Suppose you are runnin" rel="nofollow">ing an export company that produces in" rel="nofollow">in Chin" rel="nofollow">ina, does foreign direct in" rel="nofollow">investment (FDI) in" rel="nofollow">in supply chain" rel="nofollow">ins, and also exports to the U.S.  What prospects does your busin" rel="nofollow">iness face in" rel="nofollow">in the U.S., in" rel="nofollow">in Canada?  What feasible busin" rel="nofollow">iness options are available to you to maximize sales, profitability and brand salience in" rel="nofollow">in the U.S. market?  What feasible busin" rel="nofollow">iness options are available to you to maximize sales, profitability and brand salience in" rel="nofollow">in in" rel="nofollow">international markets and locations?f. Suppose you are runnin" rel="nofollow">ing an export company that produces in" rel="nofollow">in Chin" rel="nofollow">ina, does foreign direct in" rel="nofollow">investment (FDI) in" rel="nofollow">in supply chain" rel="nofollow">ins, and also exports to the U.S.  What prospects does your busin" rel="nofollow">iness face in" rel="nofollow">in the U.S., in" rel="nofollow">in Canada?  What feasible busin" rel="nofollow">iness options are available to you to maximize sales, profitability and brand salience in" rel="nofollow">in the U.S. market?  What feasible busin" rel="nofollow">iness options are available to you to maximize sales, profitability and brand salience in" rel="nofollow">in in" rel="nofollow">international markets and locations?  What achievable market outcomes can you anticipate in" rel="nofollow">in competin" rel="nofollow">ing in" rel="nofollow">in emergin" rel="nofollow">ing markets again" rel="nofollow">inst Western-based firms with advanced technology and deeper pockets than your company? 6. Expectations are that the U.S. economy in" rel="nofollow">in 2017-2018 is to perform better than other major markets and the U.S. dollar has appreciated again" rel="nofollow">inst most currencies, in" rel="nofollow">includin" rel="nofollow">ing the Canadian dollar. What in" rel="nofollow">international busin" rel="nofollow">iness expansion or softenin" rel="nofollow">ing would you analyze as opportunities or challenges, if you operate in" rel="nofollow">in Canada a busin" rel="nofollow">iness (consider one sector at a time): a) in" rel="nofollow">in the oil-patch (energy) servicin" rel="nofollow">ing sector; b) in" rel="nofollow">in retailin" rel="nofollow">ing in" rel="nofollow">in Canada imported products made abroad; c) in" rel="nofollow">in wealth management in" rel="nofollow">in the fin" rel="nofollow">inancial-bankin" rel="nofollow">ing sector; and d) in" rel="nofollow">in designin" rel="nofollow">ing gamin" rel="nofollow">ing software and applications. In each case, discuss what strategies you would use to mitigate some of the significant busin" rel="nofollow">iness risk under this given scenario. 7. Set up an offshorin" rel="nofollow">ing model in" rel="nofollow">in which Home’s skilled labour has a higher relative wage than Foreign’s skilled labour labour and in" rel="nofollow">in which the costs of capital and trade are in" rel="nofollow">initially uniform across production activities.a. Will Home’s offshored production activities be high or low on the value chain" rel="nofollow">in for a given product? That is, will Home offshore production activities that are skilled and labour-in" rel="nofollow">intensive, or low-skilled and labour-in" rel="nofollow">intensive? Support your answer with analytics and visual diagrams.b. Suppose that Home uniformly in" rel="nofollow">increases its tariff level, effectively in" rel="nofollow">increasin" rel="nofollow">ing the cost of importin" rel="nofollow">ing all goods and services from abroad. How does this affect the slicin" rel="nofollow">ing of the value chain" rel="nofollow">in? What is effect of the tariff in" rel="nofollow">increase on the value-chain" rel="nofollow">in and skills-activities on it. Support your answer with analytics and visual diagrams.c. What happens to the relative wage (wages of high-skilled workers relative to low-skilled workers) in" rel="nofollow">in each country? Support your answer with analytics and visual diagrams. 8. Thunder Rock is a small microbrewery on the outskirts of Toronto. Sales have grown rapidly in" rel="nofollow">in the last two years main" rel="nofollow">inly through word of mouth. Thunder Rock has a small brewery that is producin" rel="nofollow">ing at full capacity at the moment. Thunder Rock has been written up in" rel="nofollow">in many busin" rel="nofollow">iness publications as an example of a well-run small busin" rel="nofollow">iness. As a result of the publicity they have received a lot of attention from venture capitalists and companies that want to buy them out. Thunder Rock wants to grow their busin" rel="nofollow">iness but is unsure which direction they want to take. They could expand in" rel="nofollow">in the Canadian market, but it is saturated with many microbreweries already. Chin" rel="nofollow">ina is a huge untapped market that does not have a lot of foreign beers yet. There are a couple of large Chin" rel="nofollow">inese breweries like Tsin" rel="nofollow">ingtao, that domin" rel="nofollow">inate the market but there are many foreigners now livin" rel="nofollow">ing in" rel="nofollow">in Chin" rel="nofollow">ina that have a different taste for beer than Tsin" rel="nofollow">ingtao. a) Describe in" rel="nofollow">in detail what would be your recommendation for how they should enter the Chin" rel="nofollow">inese market. b) Explain" rel="nofollow">in the reasons why you chose this entry strategy and the advantages and disadvantages compared to other possible methods a busin" rel="nofollow">iness might enter a country.c) What strategy would you recommend the Canadian in" rel="nofollow">international busin" rel="nofollow">iness in" rel="nofollow">in tappin" rel="nofollow">ing the value in" rel="nofollow">in the globalization process in" rel="nofollow">in this case to avoid the “blues zone” often encountered in" rel="nofollow">in emergin" rel="nofollow">ing markets by multin" rel="nofollow">inational headquartered in" rel="nofollow">in mature economies. Fully explain" rel="nofollow">in your reasonin" rel="nofollow">ing. 9. For Callaway Golf, one of the largest American golf club equipment manufacturers, the world market is a very big part of its total market for clubs. The golf in" rel="nofollow">industry has a strong worldwide appeal. The game is extremely popular in" rel="nofollow">in countries around the world in" rel="nofollow">includin" rel="nofollow">ing Scotland (golf's birthplace), England, Sweden, Spain" rel="nofollow">in, South Africa, South America, Australia, New Zealand, and Japan, where golf enthusiasm rises to unheard of levels. Many countries and contin" rel="nofollow">inents from around the world are represented both professionally and at the amateur level in" rel="nofollow">in worldwide competitions. Golf enthusiasts from around the world follow the sport through televised tournaments, daily newspaper coverage, golf magazin" rel="nofollow">ines, weekly golf journals, sports reports, as well as Internet websites. Golf-related websites are among the largest categories of Internet sites. However the golf market is also highly competitive with many other firms makin" rel="nofollow">ing golf clubs and related equipment. a) Which Global strategic market choice should Calloway use? Explain" rel="nofollow">in.   10. You are the Chief Fin" rel="nofollow">inancial Officer (CFO) of a company that operates in" rel="nofollow">in almost two dozen countries around the world: in" rel="nofollow">in Europe, Central and South America, and Asia. You manufacture your product (which is used in" rel="nofollow">in the auto in" rel="nofollow">industry) in" rel="nofollow">in many countries, and also sell them in" rel="nofollow">in the same countries as well as others: all in" rel="nofollow">in the regions described above. You also import items from many countries, for use in" rel="nofollow">in your manufacturin" rel="nofollow">ing process. a) What is the difference between a free floatin" rel="nofollow">ing exchange rate and a managed or dirty float system? What is a pegged exchange rate? How does it work? What is the advantage of a pegged exchange rate regime? b) Describe the difference between fixed and floatin" rel="nofollow">ing exchange rates. How do exchange rates affect in" rel="nofollow">individual in" rel="nofollow">international busin" rel="nofollow">inesses? Which is better from the view poin" rel="nofollow">int of in" rel="nofollow">international busin" rel="nofollow">inesses? Explain" rel="nofollow">in your answer. c) Consider the current floatin" rel="nofollow">ing exchange rates in" rel="nofollow">in the in" rel="nofollow">international monetary system.  Comin" rel="nofollow">ing in" rel="nofollow">into 2017-2018, if the U.S. Federal Reserve reduces the quantity of US dollars to raise in" rel="nofollow">interest rates, while the Bank of Canada lowers the in" rel="nofollow">interest rate to support economic activity in" rel="nofollow">in Canada, what is the likely impact on the US dollar again" rel="nofollow">inst major in" rel="nofollow">international currencies?  What is the likely impact on the Canadian dollar?  As the CFO, what exchange rate strategies can you recommend to tackle the foreign exchange market risk that your company may be exposed to?  Explain" rel="nofollow">in your answer.